In the high-stakes race among grocers building out retail media platforms, Albertsons is a late entrant. The company unveiled its own advertising business late last year and officially launched it in late February — well after competitors like Walmart, Kroger and Target had already built out their own shops.
Lagging the competition seems surprising for Albertsons due to its size, and because it’s become known as a digital innovator and fast adopter of new technologies. But that isn’t hurting Albertsons Media Collective’s ability to attract significant interest from CPGs that want to spend with the grocer, said Kristi Argyilan, the retailer’s senior vice president of retail media. It also carries some advantages, she said, like being able to bypass many of the early growing pains retail ad businesses have had to go through and incorporate cutting-edge technology into the network.
Albertson’s Media Collective is still in its early days, and the company is just starting to get data back on its opening campaigns, which shows a return for CPGs of up to $14 for every dollar spent, Argyilan said. The new business is also working on new offerings like a self-service platform and thinking about ways to expand its platform to include “non-endemic” advertisers, like car makers and travel companies.
“We’re pushing it all forward at the same time,” Argyilan said in a recent interview.
The ability for retailers to build incremental revenue through retail media is large and growing. Coresight Research estimates that global revenue from retail media advertising has tripled since 2020 and will hit $75.1 billion this year.
Argyilan, who was recently president of Target’s Roundel media division and worked for various media agencies before that, said she sees plenty of opportunities for Albertsons and other grocers to nab advertising share from Google and Facebook as cookies go by the wayside and CPGs increasingly prize first-party data.
This interview has been edited for length and clarity.
GROCERY DIVE: You worked briefly at Bed, Bath & Beyond and before that spent several years with Target. What was interesting to you about the Albertsons role?
KRISTI ARGYILAN: When you look at the size of Albertsons, the sales that go through Albertsons and all the related brands that Albertsons owns, it is a massive business and should easily be within the top five retail media networks that are out there. And they’ve been nowhere on that map prior to this moment. Realizing the scale and the potential was super attractive.
Then to understand how [Albertsons CEO] Vivek [Sankaran] has this as one of his strategic priorities for the next couple of years, that we represent a really great growth lever for Albertsons, and then to be working within the company’s digital pillar and to see how much growth, agility, speed that the group is operating at — it just all came together all at the same time.
GROCERY DIVE: Albertsons is a pretty late entrant to the retail media field. What challenges come with that?
ARGYILAN: Being a late mover is an advantage because now all of these capabilities can be built and are built knowing where data privacy is going, knowing what Google is going to be doing with cookies, understanding the impact Apple and all of their privacy policies is having on other media channels being able to measure. It allows us to build for where this is going. A lot of our competitors have to work off what we call the “Frankenstack” because they have a lot of legacy systems that have been in place for the last couple of years, if not even longer than that. We’re coming in with the ability to just build it fresh in a more modern, more nimble sort of way.
The challenge is that, in some instances, we are kind of putting some companies over the tipping edge of being able to take on more capacity, and especially something that’s scaled at this size. You have to consider when you’re working with partners and asking them to take on something at the scale and complexity of Albertsons, to make sure that they really can take it up.
GROCERY DIVE: A lot of grocers, including regional chains, have added retail media capabilities recently. How do you think about the evolving competitive landscape? Can brands meaningfully spend across all of these platforms?
ARGYILAN: I think that the brands are actually pretty excited about each of the retailers having a retail media network because they can see the return on their marketing spend. We are starting to see more dollars get pulled from other places and invested in retail media. There’s more of a call for accountability, and retail media networks are obviously held at a very high standard for accountability. And because we have closed-loop reporting, we can prove that sales are happening as a result of the marketing campaigns that we’re running.
Amazon, Google and Facebook control 65% of the total digital marketing spend that is moving through the marketplace. If I can get a couple of percentage points of that, I’m in good shape. The industry marketers are looking for a more diverse partner system where they can spread their money out. And retail media networks, by the very nature of the importance of the broader partnership with CPGs, come to the table in more of the spirit of partnership and relationships so that all parties win.
GROCERY DIVE: You mentioned last year that you see local advertising as a unique opportunity for Albertsons. Can you explain that?
ARGYILAN: Albertsons is made up of 14 local grocers. That’s how the company came up, by serving these local communities. So our ability to be at scale and to execute locally is a really unique place for us to play. None of our competition is really executing that way yet. They’re still looking for the efficiency of being as broad and national as possible. We see brands really wanting to drive brand relevance. And you don’t do that by being the same everywhere. You do that by recognizing the local nuances, the diversity that makes up every community that is within the country, and Albertsons is uniquely positioned to do.
GROCERY DIVE: Does that include advertising for smaller, more local suppliers? I think of retail media as focusing a lot on the large CPGs, but is there room for some of these smaller companies to play as well?
ARGYILAN: There absolutely is. I think the challenge for us is we need to provide self service so that it’s easier for them to come to us if we don’t have a salesperson that has found them yet. How can we direct them to a self-service platform that they can then go in and execute on their own? That’s the work that we’re doing right now.
GROCERY DIVE: Display ads and sponsored listings make up so much of retail media right now. When you talk to brands these days, what else are they looking for?
ARGYILAN: Most of the CPGs are taking advantage of all the individual products that we all have. For the most part, they’re seeing pretty strong results across the board from all of us. I think the areas that they really would prefer advancement in are areas like being able to build their own audiences off our first party data so that they can then apply those audiences to the broader marketing and media buying that they’re doing.
There is a need for measurement for retail media networks to get integrated into the broader marketing measurement stacks that some of the big manufacturers are working off. Think of Procter & Gamble, PepsiCo, Coke, Unilever, how they all are doing a lot of marketing mix modeling to optimize their marketing spend. They’re asking for retail media networks to figure out how to get integrated into that so that they’re not just looking at one six-week campaign at a time to show that there’s a great return on ad spend.
And then the third piece is content. Albertsons has this really rich relationship that all of our customers have with food and the role that food plays in bringing family and friends together. Food is at the center of just about everything we do, and so there’s so much rich content that we could add to the dynamic and to the science of retail media.
GROCERY DIVE: How do you balance the need to grow revenue with making sure you’re not diminishing the consumer shopping experience?
ARGYILAN: I work very closely with the woman who is in charge of the customer digital experience, and we spend a fair amount of time talking about where advertising provides a service and provides information and enhances the experience. Every time that we launch something, we’re observing the customer journey, just to make sure that it’s not driving them away from the site, that it’s enhancing the time that they spend there.
We’ll understand better over time how richer experiences can really add to that. I think a lot of the retail media networks now are trying to figure out how to play with video in the shopping experience. You know, what kind of customer is that? There are some customers that want to linger. There are others that just want to go spear hunting and get exactly what they want and then get out. Understanding how different customer experiences either enhance or detract from their experience is key.
At some point, we see ourselves bringing what we call non-endemic advertisers to the platform too. So where does travel fit? Where does financial services fit? Entertainment? That goes back to the idea of content-rich experiences that we can bring to the marketplace.
GROCERY DIVE: Can you say a little bit more about what sort of non-endemic companies you’d be looking to partner with? Are these all companies that touch the grocery experience somehow?
ARGYILAN: Some of them are very complementary. You think of how cooking appliances, like a Krups, would very naturally be an easy, complementary non-endemic to food. But then you can also have a minivan or other things that are very fitting within the lifestyle of different audiences that absolutely could play a role in appearing in either something on our owned platforms or in some kind of an experience that we build that would be on Pinterest or Facebook or some other off-platform partner.
GROCERY DIVE: How do you see retail media integrating with in-store shopping?
ARGYILAN: In-store used to mean something just on paper, right? But it really is going full circle in terms of how digital is infiltrating the in-store experience.
We’re always leaning into experimentation to find out what kind of digital features we can bring to the shopping experience that provide a service for a customer, and then is there a way to monetize it that allows us to bring more of that to our customers? The simplest way I think about it is that our stores are also a really significant media channel for us. And so how do we use that in a really respectful way so it’s not screaming at our customers all the time?
“Amazon, Google and Facebook control 65% of the total digital marketing spend that is moving through the marketplace. If I can get a couple of percentage points of that, I’m in good shape.”
Senior vice president of retail media, Albertsons
GROCERY DIVE: What else do you see fueling Albertsons’ growth in this space?
ARGYILAN: I’m interested in watching what I call the third ring of data. It’s in the marketplace right now and marketers have been using it for years, but that’s going to go away as cookies go away. That is going to leave some really important publishers without a good database to be targeting from. I think that [with] retail media networks — especially given that they are in the content business and we are in the we-know-our-customers business — there’s a really interesting marriage between some of these really rich content publishers and the ways that retail media can give them an alternative to the path that they’re on right now, given that the databases that they’re using are going to be diminished.
GROCERY DIVE: What does Albertsons Retail Media have planned for the rest of the year?
ARGYILAN: We will start to launch new products and new ways of coming to market with a different, more advanced partner ecosystem that will start to lean into some of these areas around audiences and allowing more and more marketers to be able to offer more on a self-serve basis. Media buyers right now are all operating off of some [demand-side platform] of their choice. How do we get integrated into those activities so that it’s easier for them to engage with us?